By shopping around for an annuity a retiree could get up to 40% more income with the best enhanced annuity rates. They can do this by utilising the open market option. Staggeringly, 30% of retirees don’t even bother to look, research shows. According to research from the Association of Btirish Insurers (ABI), only two thirds of annuity buyers use the open market option when looking to buy an annuity.

Others are wrongly assuming various reasons why it would not be worth their while, according to George Ladds, head of investment and pensions at Fair Investment Company. For example, the ABI found around 23% think as they only have a small pension fund, it is not worth shopping around. In fact, it doesn’t matter whether your pension fund is £5,000 or £1 million, you should always exercise your right to use the open maket option, he explained. You could get more than 30% extra for your pension fund whatever its value if you qualify for enhanced annuity rates.

Here are our five key steps to a higher retirement annuity income. First, though, you have to realise that annuity rates are now based on a number of factors, and no annuity quote engine or annuity calculator can cater for them all to produce an accurate tailored bespoke annuity quote. There are over 1,500 medical conditions to be considered alone, never mind how much you smoke, how overweight you might be, or how hazardous your occupation might be.

Here are our those five key steps. Step 1. Our annuity calculator produces an annuity quote based on standard annuity rates only, and assumes you’re in good health and that you’re non-smoking. How does this annuity quote compare to the annuity quote provided by your current pension provider? Is it competitive? Step 2. You could get more income. Do you suffer from ill health, or have you? Do you smoke? Do you drink alcohol on a regular basis? Are you overweight, perhaps obese? Is your current occupation more hazardous ? If ‘yes’, you could get up to 30% more income. Step 3. See for yourself some examples of the higher levels of retirement annuity income you could be entitled to on our various annuity rates pages. Step 4. The income shown in our annuity calculator is for a single life, on a level payment basis, without a guarantee period. Might you might wish to think about an escalating income, or, if you’re married, a joint life annuity? Step 5. To get an accurate annuity quote tailored to your requirements, contact us and discuss your circumstances with an adviser. You can call us free on 0800 077 3510.

Despite the predictions of growth for the UK economy, with pension annuities, pension funds are still continuing to fall. Yes, the value of the nation’s pension funds has fallen again over the last month. Pension funds in the UK have shrunk further over the past four weeks, with a 30 year old’s and 60 year old’s annual annuity income falling by an average of £518 and £358 respectively, according to recent research from Aon Consulting. These latest falls mean that a 30 year old paying 10% of a 25,000 salary to a defined contribution money purchase scheme with an existing fund of £15,000 would be on course to building up a retirement pot of around £19,500 a year. However, with many people paying in substantially less, a far smaller pension fund will be on the cards for many others.

The future financial conditions for 65 year olds is even more worrying to consider, with the predicted retirement income now below half of the adequate standard of living, with an annual income averaging just over £7,600. On such an income, even those who plan to retire abroad would struggle to achieve a decent standard of living. Richard Strachan, of Aon, states that although we have seen some improvement to this country’s economic circumstances in the past six months, pension funds pots are in only marginally better shape than this time in 2009 and due to the continuing volatility in stockmarket activity, pension annuities funds shrank once again during the last month.

Third way variable annuity sales are close to £450 million in the first half of 2010, an increase of 34% compared to the 2nd half of last year, according to research by consultants Towers Watson. The value of these variable annuity sales changed little between the first two quarters of this year, at £222 million and £223 million respectively. Andy Sanders, from Towers Watson, stated that it is encouraging that there has been an increase in sales compared to the second half of last year, adding that those sales were much reduced relative to the first half of last year, prompted by product redesigns and the exit of the Hartford from the variable annuities market place as a result of the impact of the financial crisis.

According to Towers Watson, third way annuity products could be appropriate for a sizeable segment of consumers both approaching and actually at retirement and therefore present a significant commercial opportunity for various product providers. Andy Sanders said that currently, reaching the 2008 and  2009 billion pound of sales of variable annuities is looking  challenging for this year. A variable annuity is a unit-linked investment product with built in explicit guarantees, and is currently available from a small number of product providers, either as a pension or as a life assurance bond. The products vary in the way they are constructed and to the type of consumer they appeal to and when available in a pension wrapper they are usually designed to provide regular payments that are guaranteed not to fall, but may also rise if investments outperform.

Getting the best pension annuity rates is simply not enough these days, as many hard up retirees are having to plunder their savings. Unfortunately, retirees and those soon to give up work are increasingly having to dip into their hard earned savings and investments to help them pay their seemingly ever increasing day-to-day expenses. With the fallout from the recession continuing to effect people, around 30% of UK adults have used their savings and investments to supplement their ongoing monthly income over the last 12 months, according to Schroders. Collectively, this amounts to an estimated £60 billion.

On average, those who have tapped into their savings and investments have spent around £4,600 in the last year. More women than men were forced to take money from their savings. However, it is those people who are already retired or approaching retirement who are most likely to have made withdrawals to make up a shortfall in income. Those nearing or in retirement have less opportunity to rebuild their savings and their declining annuity income proves insufficient to cover their day to day expenditure, even if they managed to secure the best annuity rates.

In order to make the most of your money when you reach retirement, it is essential to shop around to find the very best pension annuity rates available. Why not start your annuity research today, it’s never too early? We can offer you the opportunity to try out our online annuity calculator to find the best deal.